What is the average rate of return on a 401K?

Overall I know it depends on your investments but I cant seem to find an average its gotta be better then keeping your money in a savings account thats gathering .0002% intrest.

A 401K won't be returned to you until you retire. A lot depends on how much you contribute, whether you have it invested in an aggressive growth plan, and the amount of time you have invested.

On average, most mutuals (what a 401k is) will return between 6% and 9% when they mature. Funds that are more aggressive might return 12% - 18%.

Compounding interest is what you're after. The money keeps building on itself over and over again, which is why you want to start planning for your future at a younger age.

In conclusion, a 401K is a lot more risky than a bank savings account, but typically the rate of return is going to be a lot more as with risk comes reward.

Yes, it is better, but it is hard to quantify. It can vary depending on how you invest your contributions, and unlike savings accounts you can lose money. I just looked at my most recent quarterly statement, and my portfolio lost a couple hundred bucks. That's peanuts compared to the principal, but it's still backwards.

The good news about a 401(k) is that it's meant to be a long-term investment. It's how you measure its growth over 5, 10, even 20 years that counts. You'll find most funds will easily beat savings accounts over the long haul.

And since most plans give you a lot of flexiblility over which funds in which to invest, you can tailor your portfolio to meet your needs. You can mix low, medium, and high-risk funds to obtain exactly the goal you have at any particular time. And if you're not sure what goes with what, there are usually tools and advice to help you decide.